bob7947

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  1. Winning a contract in a new state can present many challenges, not least of which is ensuring that your company is compliant with the state’s tax code. The worst approach to state tax compliance is assuming that the taxes your company may be subject to and the tax treatment of your company’s activity will be the same as in other states. This is especially the case when it comes to Hawaii. It’s not surprising that many government contractors venturing into Hawaii overlook the General Excise Tax (GET), as it’s often assumed that the GET is essentially the same as most other states’ sales and use taxes. However, the unique nature of the GET can catch many businesses off guard, and the Department of Taxation’s penalties can be quite unforgiving. See Aronson Fed Point.
  2. Two top Pentagon officials laid out a multi-pronged push to lower the price of the F-35 Joint Strike Fighter below $80 million apiece. The chief of the F-35 Joint Program Office, Lt. Gen. Chris Bogdan, and the director of defense pricing, Shay Assad, are underwhelmed by contractor Lockheed Martin‘s cost reduction efforts so far. Instead, they said, contractors need to invest more of their own money in reducing cost — with suitable incentives from the government — and streamline the byzantine supply chain. Meanwhile on the government side, under President Trump’s orders, Defense Secretary Jim Mattis is reviewing both how to reduce the cost of F-35 overall and whether to replace some of the Navy F-35C variants with cheaper but less stealthy Boeing F/A-18E/F Super Hornets. See breakingdefense.com.
  3. Last week was Sunshine Week, the one week out of the year when there is a coordinated effort by experts to highlight topics related to federal and state open records laws, the public’s right to know, and freedom of the press. There were numerous events around Washington, DC, as well as in cities and on college campuses around the country. The Project On Government Oversight (POGO) is a proud participant and works hard annually to bolster federal openness because “Sunlight is said to be the best of disinfectants.” Sunshine Week, however, is not just about talking about open government and cool events. It’s also about action. Last week, Senator Claire McCaskill (D-MO) introduced the “Contractor Accountability and Transparency Act of 2017” (S. 651), which POGO and eight other bipartisan groups supported. See Project on Government Oversight.
  4. I would like to inform the House that the Nuclear Decommissioning Authority (NDA) has today announced its decision to terminate its contract with Cavendish Fluor Partnership (CFP) for the management and decommissioning of 12 redundant Magnox sites (including 2 research sites) which, together with the Calder Hall reactor on the Sellafield site, formed the UK’s first fleet of nuclear power stations. The NDA ran a £6.1 ($7.7) billion tender process from April 2012 which resulted in a 14 year contract being awarded in September 2014 to the Cavendish Fluor Partnership – a joint venture between the British firm Cavendish Nuclear, a subsidiary of Babcock International, and the US company Fluor Inc. This decision was approved by the then Department for Energy and Climate Change and HM Treasury. See gov.uk.
  5. FAR 52.249-IO(a) provides: The government bears the burden of demonstrating that ICI did not perform in a timely manner and that it failed to gain approval of its submittals. DCX, Inc. v. Perry, 79 F.3d 132, 134 (Fed. Cir. 1996). Failure to proceed with the work during a dispute is a ground for termination for default. Preuss v. United States, 412 F.2d 1293, 1301-02 (Ct. Cl. 1969). In this appeal, it is undisputed that ICI failed to complete the work on time, failed to proceed with the work after the Corps rejected its proposed changes to the project, and failed to furnish some submittals and failed to gain approval of other submittals. The government has made a prima facie case for default termination; ICI must, therefore, prove that its nonperformance was excusable. DCX, 79 F.3d at 134. We have already rejected !Cl's contentions that the government delayed the project. Rather, the record makes it clear that ICI delayed the project because it disagreed with the government's design choices (see findings 7, 9-10, 12-14, 18, 22-23) and failed to provide timely or complete submittals (findings 8, 10-11, 15-17, 19-22, 25). The record strongly suggests that ICI has a basic misunderstanding as to its role as a contractor on a government project. Despite !Cl's views to the contrary, and as we now discuss, government contractors must perform the contracts they execute and cannot require the government to rewrite the contract so that they can build some other project they like better. It is well settled that the government is entitled to enforce its contracts so that it receives the work product provided for in the contract. JL. Malone & Assocs., Inc. v. United States, 879 F.2d 841, 845 (Fed. Cir. 1989). The government enjoys considerable leeway in determining what to specify. The Federal Circuit has held in the context of selecting the performance of air conditioning equipment that the "government may require performance both in excess of, or below, the standard normally accepted in a trade." Interwest Constr. v. Brown, 29 F.3d 611, 615 (Fed. Cir. 1994) (quoting Ralph Larsen & Son, Inc. v. United States, 17 Cl. Ct. 39, 46 (1989)). A number of cases from the Federal Circuit and the Court of Claims demonstrate that the contractor's role is to build the project for which it made a binding promise, not some contract that, in hindsight, it believes is more appropriate or makes more sense. For example, in JL. Malone & Assocs., 879 F.2d 841, an agency awarded a contract to replace an outdated fire alarm system and to upgrade an existing computer system. Instead, of upgrading the existing computer, the contractor offered to replace it with a new computer. When the contracting officer declined, the contractor proceeded with the work and submitted a claim. Id. at 844. The Federal Circuit affirmed a Veterans Administration Board of Contract Appeals decision denying the appeal. While the new computer would have been more advanced than the existing computer, the Federal Circuit held that the agency had no obligation to alter the basic design requirements. JL. Malone & Assocs., 879 F.2d. at 846. The court of appeals agreed with the board that it would have been unfair to other bidders to approve such a major change to the contract after the fact because they would not have anticipated when they prepared their bids that the agency would approve such a major change. Id. at 845. Similarly, in Farwell Co. v. United States, 148 F. Supp. 947 (Ct. Cl. 1957), the contract required either copper or brass pipe be supplied, but the contractor attempted to use cheaper copper tubing, which it contended would give equally satisfactory results. As the Court of Claims explained: Id. at 949. The Court of Claims also held that it would have been unfair to other bidders to allow the plaintiff to substitute the tubing. Id. at 950. If the other bidders had calculated their bids based on the use of pipe, the plaintiff would have had an advantage over them. The use of specifications insures uniformity of bidding. Id. During this project, ICI repeatedly informed the Corps of its opinion that the design of the existing system was defective and that it was a mistake to keep that design and add bigger equipment (findings 7, 9, 12, 14). The Corps considered ICI's point of view but elected to continue with its design (findings 9, 13, 19, 21-22, 24). At that point, ICI's only option was to build the project it had signed up to do. Instead, it kept dragging its feet and virtually forced the contracting officer to terminate the contract for default. While there is evidence in the record that ICI underbid the job and did not include all of the equipment in its bid (finding 34), during the hearing, ICI portrayed itself as animated by safety concerns. We need not address whether there is a safety exception to the rule that the contractor must build as designed. See Salisbury Special Tool Co., ASBCA No. 37530, 89-2 BCA i! 21,838 at 109,873. The undisputed evidence showed that the basic design had been in place for some time (findings 1, 13 ), and there was no evidence that the design caused any ill effects to the building occupants. During the hearing, ICI's expert disagreed with its contention that the design violated the building code (findings 32, 36), and there is no evidence that increasing the size of the HVAC equipment would create safety problems. While ICI continues to contend in its post-hearing brief that the specifications were defective, there is an absence of supporting evidence. In sum, any safety concerns that ICI had are unproven. With respect to the submittals, there is no evidence that the contracting officer or other Corps personnel acted unreasonably. As we have found, ICI furnished the submittals months late, or not at all (findings 15, 25). Any such delays are entirely the fault of ICI. The Corps rejected several of the product submittals but showed a willingness to work through the issues that came up (findings 13-14, 17, 19). In rejecting the submittals, the Corps made specific comments or asked specific questions that ICI should have been able to address (finding 15) if the equipment complied with the specifications. ICI failed to cooperate with the Corps and its attempts to work through the submittal process were half-hearted and sporadic. Finally, we also observe that ICI's failure to obtain approval of the accident prevention plan made it impossible to perform any work on the project (finding 16). The ACO provided a number of reasons for rejection of the plan, many of which ICI failed to challenge at the hearing and which we found had been abandoned (finding 48). We rejected ICI's other contentions concerning the accident prevention plan (findings 44-47). The failure to obtain approval of the accident prevention plan was a delay caused entirely by ICI that by itself prevented contract performance. We have examined I Cl's numerous contentions of government-caused delays and have found them to be lacking. ICI is not entitled to have the termination for default set aside, nor is it entitled to recover on its delay claim. See Industrial Consultants, Inc. DBA W. Fortune & Company.
  6. Attached is the March 9, 2017, indictment against 9 defendants in the Fat Leonard Case.
  7. On February 7, 2017, the Board received and docketed an appeal filed by appellant, Foxy Construction, LLC (FCL), from a contracting officer’s decision dated December 8, 2016. In reviewing the materials attached to the notice of appeal, the Board became concerned about its jurisdiction to entertain this appeal and issued a show cause notice to which both FCL and the United States Forest Service (USFS) (an entity within the Department of Agriculture, the respondent in this appeal) have responded. Based upon our review of those responses and the materials attached to them, we must dismiss this appeal for lack of jurisdiction. (sections deleted) I. Requirements for a Claim The Board’s jurisdiction to entertain contract disputes derives from the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109 (2012). As a prerequisite to review by the Board of a contractor’s demand for money from the Federal Government, the contractor must have submitted a “claim” to an agency contracting officer. Id. §§ 7103, 7104(a). The CDA does not define the term “claim.” Todd Construction, L.P. v. United States, 656 F.3d 1306, 1311 (Fed. Cir. 2011). In the absence of a such a definition in the CDA itself, we rely upon the FAR’s definition of the term “claim” in applying the CDA’s requirements. Id. The FAR defines a “claim” as “a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain.” 48 CFR 2.101. There is no requirement in the CDA or the FAR “that a ‘claim’ . . . be submitted in any particular form or use any particular wording.” Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). Nevertheless, “[f]or the Board to possess jurisdiction to entertain an appeal for monetary relief, the contractor must first have submitted a claim to the contracting officer identifying the basis of the request, seeking payment of a sum certain, and requesting, either expressly or implicitly, a decision of the contracting officer.” Bon Secour Management, LLC v. Department of Veterans Affairs, CBCA 4703, slip op. at 2 (May 13, 2015). In addition, if the amount of a claim exceeds $100,000, the contractor must have certified the claim in the form required by 41 U.S.C. § 7103(b)(1), and any uncertified request for payment in excess of $100,000 “is not a claim under [the CDA] until certified as required by the statute.” FAR 2.101 (48 CFR 2.101). Once a proper claim is submitted, the contractor cannot appeal until either the contracting officer has issued a decision on the claim or the statutory time for the contracting officer to issue such a decision, as set forth in 41 U.S.C. § 7103(f), has expired. Primestar Construction v. Department of Homeland Security, CBCA 5510, 17-1 BCA ¶ 36,612, at 178,330. These requirements are jurisdictional prerequisites to any appeal under the CDA. M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1329 (Fed. Cir. 2010). FCL submitted three different letters to the USFS contracting officer requesting additional money under its contract. The USFS argues in its response to the show cause order that none of those letters constitutes a “claim” that would allow us to entertain FCL’s appeal. As an initial matter, the only contracting officer’s decision that FCL attached to its notice of appeal was the one dated December 8, 2016, which purported to decide the FCL “claim” dated October 18, 2016 (which also was attached to the appeal notice). Under our rules of procedure, it is the claim and/or decision referenced in and/or attached to the notice of appeal that identifies what is being appealed. 48 CFR 6101.2(a)(1). Typically, we would look to FCL’s October 18, 2016, submission, rather than its earlier letters, to evaluate whether we possess jurisdiction to entertain this appeal. Nevertheless, in the interest of completeness, and because FCL’s various submissions were apparently viewed as related (such that the contracting officer’s December 2016 decision refers back to the earlier July 2016 decision and the April 2016 “claim”), we will evaluate all three submissions to determine whether any one of them could provide a jurisdictional basis for appeal. II. The January 7, 2016, Letter FCL first requested money under the contract in its letter dated January 7, 2016. The USFS argues that this letter was not a “claim” because FCL did not certify it in accordance with section 7103(b) of the CDA, 41 U.S.C. § 7103(b). Such a certification is required for any claim of more than $100,000 and is “a jurisdictional prerequisite for review of a contracting officer’s decision before this Board.” B&M Cillessen Construction Co. v. Department of Health & Human Services, CBCA 931, 08-1 BCA ¶ 33,753, at 167,084 (2007). “The submission of an uncertified claim [in excess of $100,000], for purposes of the CDA, is, in effect, a legal nullity.” Fidelity Construction Co. v. United States, 700 F.2d 1379, 1384 (Fed. Cir. 1983). “Although a defective certification may be corrected, a failure to certify may not.” B&M Cillessen, 08-1 BCA at 167,084 (quoting K Satellite v. Department of Agriculture, CBCA 14, 07-1 BCA ¶ 33,547, at 166,154). There is no question that FCL did not attempt to certify its January 7 letter in accordance with the CDA. It is unclear, though, whether any certification was required. In its letter, the dollar figure that FCL identifies as the amount of the requested backcharge is $51,051.47, a figure below the statutory threshold for requiring certification.1 Yet the attachments to the January 7 letter, which FCL represented constituted its “claim,” include an unsigned “Application And Certificate For Payment” apparently seeking an additional payment of $95,207.71, which, coupled with the $51,051.47 backcharge request, exceeds the $100,000 certification threshold. The contracting officer expressed confusion over the amount of FCL’s “claim,” and it does not appear from the record that, in response to the contracting officer’s statements in a January 19 email message and at a meeting on April 14 that the total claimed amount exceeded $100,000, FCL made any attempt to clarify whether it was only seeking to recover the $51,051.47 figure through the January 7 submission. We need not resolve how much FCL was requesting in its January 7 letter because there is another reason – one that FCL candidly acknowledges – that precludes the January 7 submission from constituting a CDA “claim.” Nowhere in the January 7 letter does FCL request a contracting officer’s final decision, as required under the definition of a “claim” in FAR 2.101. Without such a request in the claim letter, we lack jurisdiction over an appeal based upon that “claim.” Bon Secour Management, slip op. at 2. It is true that “[t]he law does not require an explicit demand or request for a contracting officer’s decision; ‘as long as what the contractor desires by its submissions is a final decision, that prong of the CDA claim test is met.’” James M. Ellett Construction Co. v. United States, 93 F.3d 1537, 1546 (Fed. Cir. 1996) (quoting Transamerica Insurance Corp. v. United States, 973 F.2d 1572, 1576 (Fed. Cir. 1992), overruled in part on other grounds by Reflectone, Inc. v. Dalton, 60 F.3d 1572, 1579 & n.10 (Fed. Cir. 1995) (en banc)). Further, “[t]hat the contractor intended to make such a request [can] be ‘implied from the context of the submission.’” Rex Systems, Inc. v. Cohen, 224 F.3d 1367, 1372 (Fed. Cir. 2000) (quoting Heyl & Patterson, Inc. v. O’Keefe, 986 F.2d 480, 483 (Fed. Cir. 1993), overruled in part on other grounds by Reflectone, 60 F.3d at 1579 & n.10); see Red Gold, Inc. v. Department of Agriculture, CBCA 2259, 12-1 BCA ¶ 34,921, at 171,721 (2011) (“The request may be either explicit or implicit,” but it must be clear from the submission that “what the contractor desires . . . is a final decision.”). “To make this determination, the Board looks at the totality of the correspondence, including the submissions and the circumstances surrounding them,” using “a common sense analysis . . . to determine whether the contractor communicated his desire for a contracting officer’s decision.” Red Gold, 12-1 BCA at 171,721. There is no express request for a decision in the January 7 letter. Further, looking at the totality of FCL’s communications, we cannot imply a request for a final decision into the language of that letter. Although FCL uses the word “claim” in its January 7 letter, FCL asks the contracting officer to “review and comment” on, rather than decide, its request. Further, in its email message accompanying the January 7 letter, FCL indicated that the January 7 letter and its accompanying materials related to “the issues leading to a possible back charge” and that, if the contracting officer had any questions, she should call FCL’s owner. Exhibit C to Respondent’s Show Cause Response (emphasis added). We recognize that a “cordial closing” to a letter or other written communication that invites further discussions does not, in and of itself, “compromise the letter’s status as a claim.” James M. Ellett, 93 F.3d at 1546; see Contract Cleaning Maintenance, 811 F.2d at 592 (“The fact that in those letters the appellant frequently expressed the hope that the dispute could be settled and suggested meeting to accomplish that result does not mean that those letters did not constitute ‘claims.’”). Nevertheless, a “letter [that] expresses a willingness to reach an agreement as opposed to a demand that the contracting officer reach a final decision” is not a claim. Hoffman Construction Co. v. United States, 7 Cl. Ct. 518, 525 (1985). Here, considering as a whole the letter, its attachments, and the email message through which the letter and attachments were delivered, there was no implied request for a final decision. In its response to the Board’s show cause order, FCL represented that its intent in submitting the January 7 letter (as well as its subsequent April 26, 2016, letter) was to begin a negotiating process with the USFS. The United States Court of Appeals for the Federal Circuit has distinguished between, on the one hand, a request for equitable adjustment that seeks materially to further the negotiation process through exchanges of information aimed at achieving a mutually agreeable settlement and, on the other, a formal claim intended to commence the litigation or prosecution process. Bill Strong Enterprises, Inc. v. Shannon, 49 F.3d 1541, 1550 (Fed. Cir. 1995), overruled in part on other grounds by Reflectone, 60 F.3d at 1579 & n.10. Although a contractor (except in circumstances involving routine requests for payment and termination settlement proposals) may choose to initiate the claim prosecution process while or even before attempting to negotiate an amicable resolution, Systems Development Corp. v. McHugh, 658 F.3d 1341, 1347 (Fed. Cir. 2011) (impasse in negotiations is not necessary before claim can be submitted), the contractor is entitled to pursue negotiation before submitting a formal claim and to treat the costs that it incurs in that negotiation process as contract administration costs. Tip Top Construction, Inc. v. Donahoe, 695 F.3d 1276, 1284 (Fed. Cir. 2012). That is what FCL says it did through its January 7 submission, and the absence of a request for a contracting officer’s final decision in the letter is consistent with FCL’s representation that it did not intend for that submission to be a CDA claim. Until the contractor submits a formal claim meeting the requirements of the FAR, though, it cannot commence the appeal process. Todd Construction, 656 F.3d at 1311. The January 7, 2016, letter does not constitute a “claim” that could provide us a basis for exercising jurisdiction. III. The April 26, 2016, Letter In its letter dated April 26, 2016, FCL requested an equitable adjustment of $329,800.2 A claim in that amount requires certification. 41 U.S.C. § 7103(b). Because FCL did not certify its submission, it was not a claim, and we lack jurisdiction to entertain an appeal arising from it. B&M Cillessen, 08-1 BCA at 167,084. The fact that the contracting officer actually issued a decision in response to the April 26 submission, notifying the contractor of its right either to appeal to the Board or to file an action in the Court of Federal Claims (using the language set forth in FAR 33.211(a)(4)(v) (48 CFR 33.211(a)(4)(v)), does not somehow eliminate the jurisdictional defect because “[a] contracting officer’s decision rendered on an uncertified [claim] is a ‘nullity.’” Regency Construction, Inc. v. Department of Agriculture, CBCA 3246, et al., 16-1 BCA ¶ 36,468, at 177,705 (quoting EHR Doctors, Inc. v. Social Security Administration, CBCA 3426, 13 BCA ¶ 35,371, at 173,572). IV. The October 18, 2016, Letter The letter that FCL attached to its notice of appeal, dated October 18, 2016, requested payment of “approximately $225,000.” That letter cannot constitute a claim for two reasons. First, like the April 26 letter, the October 18 letter seeks payment of more than $100,000, but without any CDA certification. The Board lacks jurisdiction to entertain an appeal arising from it. B&M Cillessen, 08-1 BCA at 167,084. Second, the use of the word “approximately” in the October 18 letter is inconsistent with the FAR requirement that a claim be stated in a “sum certain.” 48 CFR 2.101, 52.233-1(c). In J.P. Donovan Construction, Inc. v. Mabus, 469 F. App’x 903 (Fed. Cir. 2012), the Federal Circuit held that the use of the word “approximately” in describing the claimed amount meant that the claimed amount was not a “sum certain” unless the contracting officer, from other information or material in or accompanying the claim, could determine the exact amount that the contractor was claiming: Id. at 908; see JEM Transport, Inc. v. United States, 120 Fed. Cl. 189, 198 (2015) (discussing the J.P. Donovan decision); G&R Service Co. v. General Services Administration, CBCA 1876, 10-2 BCA ¶ 34,506, at 170,166 (citing Van Elk, Ltd., ASBCA 45311, 93-3 BCA ¶ 25,995, for proposition that approximate amount does not constitute a sum certain). Here, as in J.P. Donovan, no clarifying supporting material accompanied FCL’s October 18 letter. Further, the dollar figure approximation in that letter differed from the dollar figures in earlier submissions. In such circumstances, the identification of “approximately $225,000” in cost overruns does not state a sum certain, as required for a claim under the FAR. In response to the Board’s show cause notice, FCL states that it is now seeking “exactly $153,430.12 as a Claim” from the USFS, a figure that differs from any of its prior submissions to the USFS. It is not too late for FCL to pursue this claim, see 48 CFR 33.206(a) (requiring contractor to submit claims to contracting officer within six years of accrual), but, before it files an appeal with the Board, FCL must first submit that claim to the contracting officer with the required information, identify the amount of its monetary request in a sum certain, certify the claim using the language required by the CDA (set forth at FAR 33.207(c) (48 CFR 33.207(c))), and allow the contracting officer to decide it. “If the contracting officer,” after receipt of a proper claim, “does not render a timely decision, or [the contractor] is unwilling to accept the decision, [the contractor] is free to exercise its right of appeal to this Board.” Red Gold, 12-1 BCA at 171,722. See Foxy Construction, LLC
  8. There is another entry to the Fat Leonard story. Also, try the one below for disgust. Both are on the Home Page.
  9. I'm posting this question for SKoslow: It was posted as a blog.
  10. Thank you for responding to this poll. I am surprised to see that this poll is not as lopsided as I thought it would be.
  11. Wifcon.com now has over 4,400 approved members. When we reached the approved member 4,000, I notified the member of the monetary reward for that registration. It took me a few PMs to convince that member that it wasn't a gag. I plan to notify member 4,500 of another monetary reward when I approve that registration. I'm hoping that if I announce that there will be such an award to member 4,500 beforehand, I won't have to send so many PMs to member 4,500. It should be about a 1 to 2 months from now for the 4,500th approved registration.
  12. I hope DHS hires Qin Shi Huangdi as a consultant.
  13. Your Registration Request for an account here may take a couple of days to get approved. The software for this forum may or may not backlog registration requests. If the software backlogs your request, I may not see it for hours. If it is not backlogged, I will see it when I check requests--which may be once a day. I approve all requests myself. Wifcon.com is similar to the original Wizard of Oz movie where an aging wizard runs things from behind a screen. In this case, I am the aging wizard. So, it may take a bit of time to have your request approved. There are 2 Discussion Forums here: Contracting and Assistance. When your request is approved, you become a Member. Members and Guests can see the Contracting Forum. When Members login they can post to the discussion board. There is an Assistance forum designed for the U. S. Agency for International Development (USAID). Unfortunately, it is not shown to Members because of its inactivity. However, if you are with USAID, you receive a secondary membership which allows those members to see the Assistance Forum and the Contracting Forum when they log in. If you are someone that I think may be interested in an Assistance Forum, I automatically give you the secondary membership. If you want access to the Assistance Forum because you want to participate in it, send me a Private Message and I will give you the secondary membership. You can find the link for private messages at the top right of the screen. Just remember, as of now, no one has posted anything to the Assistance Forum since mid-2016. I only keep it in existence because I hope that it is eventually used.
  14. GSA maintains the CAAC Class Deviation Letters site. I've been checking it for over 2 years and there hasn't been a Class Deviation posted. Does anyone know if there have been any Letters issued by the CAAC since February 27, 2015?